Genie Energy announces formation of ‘captive’ self-insurance subsidiary

Genie Energy announced an expansion of its consumer product portfolio and the formation of a “captive” self-insurance subsidiary to enhance the Company’s risk management strategy. Genie announced that it has formed a wholly-owned captive insurance subsidiary. In the fourth quarter of 2023, Genie paid this captive entity $51 million in premiums for insurance coverage of various risks. As required by GAAP, Genie will record a one-time, non-recurring, non-cash charge of approximately $45 million in the fourth quarter as an insurance loss reserve related to the coverage provided to Genie by the captive entity. While this loss reserve will be reflected in Genie’s financial results under GAAP, the Company does not expect this charge to impact its Adjusted EBITDA results for the fourth quarter or full year 2023. The $51 million in premium payments to the “captive” insurance subsidiary will remain on Genie’s consolidated balance sheet within its reported measure of consolidated cash, restricted cash, and marketable equity securities. The funds will be available for investment as determined by Genie management to support the Company’s corporate strategic objectives. Genie expects to report a year-end 2023 balance of approximately $165 million in consolidated cash, restricted cash, and marketable equity securities, compared to $121 million at year-end 2022. The expected figure is an estimate and is subject to change as Genie completes its fourth quarter and full-year financial statements and the audit of its annual statements.